The global AI investment boom is driving a surge in memory demand, exacerbating the supply-demand imbalance in the NAND flash market. According to reports, Samsung Electronics Co., Ltd. plans to set the price increase for its major NAND products in the second quarter at a level similar to the hike implemented in the first quarter of this year.
Previously, it was reported that Samsung Electronics raised NAND prices by 100% in the first quarter, with DRAM prices also increasing by 100%. This means the company's NAND supply prices have accumulated an increase of approximately three times since the end of last year.
Industry professionals cited in reports indicate that memory manufacturers' bargaining power has reached an unprecedented level, and downstream demand companies will have no choice but to accept the prices proposed by Samsung Electronics. Meanwhile, other manufacturers such as SK Hynix and Kioxia are also preparing for further price increases.
**AI Inference Demand Surges, NAND Supply Falls Short** The core driver behind the sharp climb in NAND prices is the expansion of storage demand brought about by advancements in AI technology. As AI evolves from the data training phase to the inference phase, which involves understanding and processing user requests, the demand for massive data storage has significantly increased, elevating the strategic value of NAND.
Concurrently, major technology companies continue to ramp up investments in AI data center construction, leading to a simultaneous sharp rise in procurement demand for storage equipment, further pulling NAND prices upward.
Data from market research firm DRAMeXchange shows that the average fixed transaction price for the 128Gb multi-level cell (MLC) NAND universal product soared to $12.67 last month, a month-on-month increase of 33.9% and a staggering 452.3% surge compared to a year ago.
**Supply Side Continues to Shrink, Manufacturer Pricing Power Strengthens** Active supply contraction is another key factor behind the current price strength. The top two players in the NAND market, Samsung Electronics and SK Hynix, have recently shifted their resource focus towards higher value-added products like High Bandwidth Memory (HBM), significantly cutting NAND production capacity. The effects of production cuts initiated last year are still being felt, and the structural tightening of market supply is unlikely to reverse in the short term.
According to reports, given that manufacturers hold strong pricing power, even though final transaction prices may vary slightly depending on the customer, the price increase幅度 set by Samsung Electronics is generally expected to be accepted by the market. Furthermore, the overall upward trend in NAND prices is anticipated to persist for some time.
**Price Hike Wave Spreads, Industry Follows Suit** As the global leader in the NAND market, Samsung Electronics' pricing moves have always served as a bellwether for the industry. The aforementioned industry professionals revealed that major competitors like SK Hynix and Kioxia are preparing to follow suit with price increases, forming an initial联动 effect of industry-wide NAND price hikes.
For investors, the continuous rise in NAND supply prices is expected to directly improve the profitability of related memory manufacturers. Against the dual backdrop of an ongoing AI infrastructure investment cycle that has yet to peak and leading manufacturers shifting capacity focus towards HBM, the tight supply-demand dynamics and price strength in the NAND market may persist for an extended period.
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